VTDigger is THE source for in-depth investigative coverage of the political, economic, and legislative arenas in which important issues are debated. In my opinion it provides the quality, unbiased, and measured coverage that is sorely needed to help Vermonters navigate our changing world.

-- Kate Fox,

THANK YOU We Did It!

Thanks to the support of over 600 readers, we were able to meet our $50,000 second quarter goal.

Brock gives tough love speech to renewable energy industry crowd

Gubernatorial candidates Gov. Peter Shumlin and state Sen. Randy Brock couldn’t have more divergent views on renewable energy. Shumlin, a Democrat, is an avid supporter of government subsidies for wind, solar and other forms of green power, while Brock, the GOP challenger, believes the renewable industry should receive no special treatment.

Industry representatives greeted Shumlin with enthusiasm but gave Brock a cooler reception at the Renewable Energy Vermont Conference in Burlington on Tuesday.

Shumlin pledged that the state would continue to fund the Clean Energy Development Fund (CEDF), even in the face of state budget challenges. He said the state’s push for renewable energy is vital in the struggle against climate change. The governor also sees alternative power as an economic driver for Vermont.

“Anyone who says that the renewable transformation in Vermont is a job killer is not looking at the facts,” said Shumlin.

The governor defended energy policies like the standard offer, which fixes retail rates for renewable energy purchases, and net metering, which allows Vermonters to generate their own small-scale renewable power.

Shumlin wouldn’t say where funding for the CEDF would come from in light of the recent lawsuit filed by Entergy Corp., the owner of Vermont Yankee, the state’s only nuclear power plant. Entergy has refused to pay a new generating tax that would help support the program. The governor said the state is looking at raising wind power tax rates and is examining energy tax models in nearby states like Connecticut.

Brock doesn’t see renewable energy as a panacea for climate change and the state’s economic woes. He questions the value of Vermont’s renewable energy subsidies and programs and argues that they often unfairly burden poor ratepayers.

“I had an underlying question in my mind: Is it appropriate for government to pick industrial winners and losers in the renewable energy industry?” asked Brock.

He said the state’s subsidy program for solar and wind energy might not withstand a rigorous cost-benefit analysis.

“Are we asking the taxpayer and the ratepayer to become investors in technology? What’s the ratepayer going to get in return? … Are they going to get any benefit? Folks weren’t able to answer that question, at least to my satisfaction,” said Brock.

Brock suggested that the renewable energy industry avail itself of existing grants and subsidies, through the Vermont Employment Growth Incentives program and the Vermont Economic Development Authority, rather than rely on renewable energy-specific subsidies.

Brock concluded his speech by challenging members of the industry to prove that they could be successful in a competitive free market environment. He maintained that state government could help, but chiefly through programs which remained “fully transparent to taxpayers.”

While the audience applauded and laughed through Shumlin’s meandering speech, Brock’s was met with a less convivial response. He joked that he’d been advised to wear a Kevlar vest to the conference.

At one point Shumlin cracked that he could only help the industry if elected governor: “If not,” said Shumlin, “you guys might be out of luck.” To which talk moderator and Renewable Energy Vermont executive director Gabrielle Stebbins replied, “Agreed.”

After the forum, Stebbins praised Shumlin’s commitment to the Clean Energy Development Fund, which has funded more than 2,500 renewable installations statewide, mostly for small businesses. She described it as “a great return on investment.”

Stebbins disagreed with Brock’s assessment of the value of the standard offer program and the Clean Energy Development Fund. At a press conference the day before, Brock said he’d consider eliminating the CEDF.

At that press conference, Brock also criticized certain interactions between the state and renewable industry companies as examples of “crony capitalism,” a charge to which Shumlin responded on Tuesday by arguing that Vermont “has been very balanced in ensuring that we have cheap affordable power, and the right incentives in place,” and “that to turn back the clock … will be a jobs killer.”

Nat Rudarakanchana is a recent graduate of New York’s Columbia University Graduate School of Journalism, where he specialized in politics and investigative reporting. He graduated from Cambridge University with a B. Read more

Comments

Mike Kerin:

October 3, 2012 at 6:56 am

I guess Brock doesn’t have a problem with subsides for nuclear, oil, and coal though.
They all get much bigger subsidies than wind and solar do. Solar works very well even here in Northfield Vermont. My array makes all my power since 8-08 and then some goes back into the grid!

If the solar panels ever stop working there is no waste that is dangerous for thousands of years. While they are working there are no spills that can pollute our streams and rivers and lakes.

According to a Manhattan Institute study I was reading about this morning there is this: The Production Tax Credit (PTC) provides a subsidy to the wind industry that is at least 12 times greater than that provided to the oil and gas sector and 6.5 times greater than that provided to the nuclear industry. http://www.manhattan-institute.org/html/ir_25.htm#.UGwmQkITsy4

The problem is scale: what you have at your home is world’s away from the projects standing on our ridges now and being proposed for more and more of them. Shumlin says as many and as fast as we can — and obviously as large as we can, too, because that’s where the money is.

From the ThinkProgress website:
Mapping US fossil fuel subsidies
In a 2011 study of historical US energy subsidies published by DBL Investors, Nancy Pfund and Ben Healy analyse US federal government support for various energy industries during their formative years. For the coal industry this meant cheap land grants in the 19th century. For oil and gas it was tax incentives during the first half of the 20th century, followed by costs of regulation, civillian R&D and liability risk-shifting among others for nuclear power from the late 1940s. Finally, for modern renewables it was tax incentives from the early 1990s onward.
Drawing on government, academic and NGO sources, Pfund and Healy find that when the first 15 years of subsidy life are compared, government support for the oil, gas and nuclear industries as a percentage of inflation-adjusted federal spending far outweighed the support granted to renewables.
Taking a longer-term view and again adjusting for inflation, the authors find that between 1918 and 2009, the oil and gas industry received a cumulative $446.96 billion in subsidies compared to just $5.93 billion given to renewables in the years between 1994 and 2009. Meanwhile, the nuclear industry benefitted from a cumulative $185.38 billion in federal subsidies between 1947 and 1999.
Pfund and Healy conclude:
“[C]urrent renewable energy subsidies do not constitute an over-subsidized outlier when compared to the historical norm for emerging sources of energy. Rather … federal incentives for early fossil fuel production and the nascent nuclear industry were much more robust than the support provided to renewables today.”
The study doesn’t just highlight the advantage the federal government gave oil, gas and nuclear in the form of subsidies. It also shows that the government continued the financial support as these industries matured, arguably enshrining a market distortion.
Pfund and Healy uncover evidence of direct and indirect coal subsidies reaching back as far as 1789 when the US federal government enacted a tariff on imported coal. Coal is not included in the final total of subsidy amounts, however, due to a lack of reliable data reaching back to the industry’s formative years in the early 1800s.
But it’s clear that coal continues to receive subsidies more than 200 years after the height of the Industrial Revolution. The US Energy Information Administration tallied federal government subsidies to the coal industry at $3.17 billion in 2007.

To answer Sen. Brock’s question about government picking winners and losers, the answer is yes. Government has been subsidizing oil, coal, nuclear and gas at the expense of wind, solar, hydro and other renewables.

It’s what government does, but it is now time to shift the subsidies away from well established sources of power to those newer technologies that genuinely need a boost.

True. What I meant to say, and failed to, was that whatever numbers you want to use you can find to back up whatever position you want to take. I agree with Mr. Gill, it’s all the same thing. And speaking of which, how different are Brock and Shumlin ultimately? Both are for big business and industrial scale solutions to our problems. I’ll be voting for Annette Smith and hoping that the votes get counted properly…

Gotta love that free-market approach. Any chance that the externalities like the cost of cleaning up after themselves will be accounted for in the free market pricing of coal, oil, gas and nuclear? Not too likely, Randy….

There are a number of points in Brock’s and other comments worth addressing:

1) “Brock concluded his speech by challenging members of the industry to prove that they could be successful in a competitive free market environment.” Others have already addressed the question of subsidies, so I won’t go into detail, except to note that the discussion of subsidies is often skewed by cherry-picking the timeframe and by defining “subsidy” to meet the ideological needs of those doing the study. There is no question, however, that over the last 3+ decades, fossil fuels and nuclear have received far more subsidies than renewables.

Which leads to my real point: there is no “competitive free market environment” in energy in this country, unless you count lobbying Congress as a “free market.” Every form of energy is and always has been subsidized, and there is no realistic prospect that this is going to change any time soon. There is simply no factual basis for Brock’s demand, nor any prospect of there being one in the foreseeable future.

2) ““Are we asking the taxpayer and the ratepayer to become investors in technology?” Yes, of course we are. Just like we asked taxpayers to create the nuclear industry from scratch, and to underwrite investigations into “clean coal.” Not to mention the internet on which we’re having this discussion.

3) “What’s the ratepayer going to get in return? … Are they going to get any benefit?” If you consider breathable air, drinkable water and a climate conducive to continued human life on the planet to be “benefits,” the answer is resoundingly: yes, there are considerable benefits to underwriting the transition to renewables.

4) Finally, David Usher is simply wrong when he demands “baseload power” for “the reliability the grid demands.”

First, electric demand is no more constant than supply. On a daily and seasonal basis, electric demand undergoes HUGE variations (roughly 50%). If generators had to produce power all the time to meet peak demand, then MOST of the time, vast quantities of power would be wasted.

Second, by breaking supply and demand into manageable time segments, the grid operator equalizes the two on an ongoing basis. In other words, the need for reliability is met by the grid itself, not by “baseload” generators.

Third, grid operators have made it clear that they have adequate means to handle a portion – in ISO-NE’s case, 20% — of supply from intermittent renewable sources and that they are working on increasing that percentage in the future. Since current supply comes nowhere close to the 20% figure, there’s plenty of time for ISO to find new ways to handle the technological transformation underway.

John,
In the meantime Vermont is to build on about 200 miles of ridge lines, as Blittersdorf advocates, about 57 Lowell Mountains at a cost of $9.2 billion?
$160 million x 57.
Vermont will look like a pin cushion and will have noisy ridge lines all over the state and the cost of that variable, intermittent energy will be about 10c/kWh, subsidized, about 15c/kWh, unsubsidized, per GMP; grid prices have been at about 5.5c/kWh for the past 3 years, and likely will stay that way as utilities use more low-cost, low-CO2 emitting gas that will be in plentiful supply for at least the next 100 years.
Most people do not know about 25-30 percent of the hours of the year there is not sufficient wind speed to turn the rotors in New England, and that most of the energy is produced during only relatively few hours of the year with higher wind speeds?

A lot of loose numbers being thrown around here comparing apple to oranges. How about getting honest and do the comparitive subsidy analysis based on cents/btu. I’m willing to wager that on that basis oil/nuke is still considerably cheaper than wind/solar.

Of couse include externalities – now which number should we chose and what extenalities do we chose. Or do we just grab a number and impacts that make the economics of our position look good. How far do you reach down the impact chain do you just consider that the shoe was lost cuasing the horse to be lost and finally the war?

A few comments from someone who was a lighting engineer for many years:

a) If the Emperor Constantine had nuclear power plants — that would still represent something we needed to deal with today. The NET PRESENT COST of all future nuclear waste management and all future nuclear clean-up — assuming there is never another accident — is probably in the Trillions — it’s incalculable.

b) The RISK-ADJUSTED cost of generating power from Vermont Yankee (owned and operated by the Insane Risk Posse) is likewise astronomical — as it is one of the most dangerous plants in the US. (uprate/age/tons of waste/mgt, etc.)

c) The biggest FREE LUNCH the nuclear power industry enjoys is LIMITED LIABILITY.

“Stebbins praised Shumlin’s commitment to the Clean Energy Development Fund, which has funded more than 2,500 renewable installations statewide, mostly for small businesses. She described it as “a great return on investment.”

Stebbins was supposed to be an impartial MODERATOR, not a PROMOTER of RE during this meeting which was set up as a friendly forum for Shumlin so he could feed red meat to the RE lobby and get more of their campaign contributions.

The CEDF has NOT been a good investment. It is a vehicle to get money for non-viable RE projects that could not get a dime of private financing from a bank. Here are some egregiously wasteful examples:

BOLTON VALLEY SKI AREA WIND POWER A DISMAL FAILURE?

The Bolton Valley Ski Area decided to be the first in Vermont to have a wind turbine. It decided to have a 100 kW wind turbine made by Northern Power Systems, Barre, Vermont. The purpose was to generate power and, by selecting a Vermont wind turbine, it would likely be favorably considered for a Clean Energy Development Fund subsidy.

Those outputs are much lower than the ones stated on page 6 of the NPS specifications. Outputs should be about 55-65 kW for these windspeeds, minus parasitic losses which appear to be about 11-12 kW at temperatures below 32F. May be the windspeed indicator reads high. Adding in some weeks of down-time further reduces power production and CF. This may explain the shortfall in power production and the low CF.http://www.northernpower.com/pdf/Northwind100GeneralSpecification.pdf

Conclusions

It appears the Bolton Valley Ski Area may have made a mistake selecting a 100 kW wind turbine to reduce its power costs. The value of the revenue will be grossly insufficient to justify the project.

It seems the CEDF should do more due diligence before donating the people’s money to such projects.

RESIDENTIAL WIND POWER A DISMAL FAILURE?

The residential wind system is for a recently built LEED Platinum house in Charlotte, Vermont, capacity 10 kW, grid-connected, 80-ft mast, all-in cost $40,500, or $4,050/kW. The project received a CEDF cash subsidy of $12,500

Power production is about 6,286 kWh/yr; 6,094 kWh is used, 192 kWh is sold to the utility as part of “net-metering”
Capacity factor = (6,094 + 192) kWh/yr/(10 kW x 8,760 hr/yr) = 0.0712
The owner pays the utility $9/mo. for standby power.
Useful service life is about 10-15 years after which it will need to be replaced or refurbished.

Residential wind power systems are very uneconomical investments.
The legislature enacting subsidies for such projects is a grossly inefficient use of the people’s money.
It appears the CEDF should do more due diligence before donating the people’s money to such projects.

We can all feel really good having renewable, clean energy but at what cost to our children’s future? We need to do a complete cost-benefit analysis, end all subsidies for energy, and then make a decision.

When we are thinking about our children’s future, let’s please include the “externalities” of unmitigated climate change. Please read Bill McKibben’s 8/2/12 article in Rolling Stone, “Global Warming’s Terrifying New Math”, if you haven’t already. ” Terrifying” in this case is NOT fear-mongering or over-statement.
This isn’t to say that tiny Vermont’s energy choices will have a sizable direct effect in mitigation. But it is to acknowledge that the affordable ways we can figure out in this state to move toward dependence on safe, sensible renewable energy will continue to inspire & motivate other states by showing what is possible, when you choose to have the debate and make the effort. That’s a true legacy for our children.

Randy Brock certainly has painted himself into a tight corner with his criticism of the incentive-based “renewable energy” boom. With that said, he is clearly taking the high road on this issue, while the Governor panders and the “moderator” is siding with Shumlin.

** At one point Shumlin cracked that he could only help the industry if elected governor: “If not,” said Shumlin, “you guys might be out of luck.” To which talk moderator and Renewable Energy Vermont executive director Gabrielle Stebbins replied, “Agreed.” **

This may or may not be an actual joke, but it is telling either way.

Ms. Stebbins previously took a strong position regarding another subsidized “green” technology by allowing Burlington Electric Department install their first smart meter on her home with dog and pony show included.

Where is this all heading?

Most likely towards VY accidentally shutting down and a sudden electricity price hike that shows us why Lowell was built in such a hurry. With certain investments currently being made in Vermont’s natural gas transmission and a state full of smart meters all ready to measure exact time of use, Gaz Metro and all their cronies are about to make bank.

The implication of Matt Fisken’s last paragraph is that VY power is keeping VT electricity bills low. This flies in the face of all the known facts.

Vermont’s utilities have no contracts with VY, so VY has no direct impact on VT prices. VT utilities do buy power through the ISO-NE markets (directly and through market-based contracts) where VY sells most or all of its power, but VY’s impact on this market is tiny: it accounts for about 2% of the grid’s total power. All of the information available to the public suggests that market prices are currently LOWER than VY’s costs in any case.

In other words, if VY were to shut down, accidentally or otherwise, there would be NO discernible impact of Vermont electricity prices.

Hopefully you’re right John, but I think it’s presumptuous to say there will be no impact on prices. Play the shell game all you want, but when Vermont’s largest generator stops generating power for an extended period of time, (to quote Dr. Emmett Brown) “you’re going to see some serious $#!†”.

Whether VY keeps running for another 20 days or 20 years, the fact is that electricity is getting more expensive. We know that wind must be backed up by power plants, preferably ones that run on natural gas. We know that Tom Evslin, who was instrumental in bringing interval metering to nearly all Vermont homes and businesses is also heavily invested in gas and is also starting his own NG distribution company to extend the reach of Gaz Metro (Vermont Gas). Not everyone has bought the lie that “renewable” generation sources and smart meters are necessary and justify the massive subsidies they’ve received. The belief that these investments will somehow make the grid more reliable and efficient, all while saving us from climate change is so far from reality. These technologies are designed to make money, plain and simple. If they happen to destroy the environment and make people sick, you can bet there will be no apologies from the government that stimulated it, the regulators that enabled it, or the utilities raking it in.

Natural gas is the backup for the New England grid now. Natural gas generation is dispatched now, every day, to meet fluctuations in demand due to weather, time of day, season, or power plant outages. In order to accomodate industrial wind generation, natural gas plants do not need to be added to the New England grid. In fact, whenever the wind projects are generating, LESS natural gas needs to be burned than if they were not generating.

Avram,
“In fact, whenever the wind projects are generating, LESS natural gas needs to be burned than if they were not generating.”

A true statement, but it is not nearly as much less as claimed by IWT promoters, because these OCGTs and CCGTs will be operating at a lower output AND ramping up and down, and that is INEFFICIENT, requiring more Btus/kWh, just as a car would, and they wear out more quickly, just as a car would.

Whereas the NE grid has a significant gas turbine capacity to deal with wind energy, the owners of that capacity will want to be compensated for the inefficiencies they experience. Who pays? Owners (the disturbers) or rate payers?

Wind Energy Integration Fees

For a proper evaluation of wind energy cost, the total would have to include not only the LCOE of the wind turbines, but also all or part of the LCOEs of:

Rarely are any of these costs identified, quantified and charged to wind turbine owners as wind energy integration fees, i.e., they are getting a free ride.

John Greenberg:

October 8, 2012 at 9:03 am

Actually, Matt Frisken, what’s “presumptuous” is to imply a VY impact on prices without specifying any mechanism.

Yes, VY is Vermont’s largest generator. If I’m not mistaken, IBM is its largest manufacturer. In both cases, most of the product is consumed elsewhere. This is neither a particularly unusual situation nor an especially puzzling one.

Electricity prices are quite volatile, but “the fact is that electricity is [NOT] getting more expensive;” in fact, in the last 4 years, its gotten much cheaper (at the wholesale level) thanks to falling demand and increasing supply of natural gas (see Avram Patt’s comment immediately above).

And when electricity prices do rise, as inevitably they will at some point, it’s pretty clear that any impact of Vermont Yankee on the process will be incredibly small, as is its contribution to the New England grid. As noted previously, VY contributes around 2% of the grid’s power; there’s no reason at all to think any price impact from this source will have a larger impact than that.

If you think I’m wrong, please present us with the actual facts on which you’re basing your conclusions and we can all make our judgments accordingly.

John, I don’t think you’re wrong, but I do think you’re confusing my speculation with a presentation of the facts. I have no ability to see into the future, so I cannot possibly provide you with factual information about events that have yet to occur.

I know that two years ago, ISO-NE said that closing VY will cause problems locally, possibly “melting transmission lines.” Like most worst case scenarios, this was quickly swept under the rug. If this is still a possibility, then it would be wise to consider the costs of replacing those melted lines and the economic impact such an event would have on customers.

Assuming that the NRC’s ruling stands, we can expect a shut down will be of the unplanned variety and not treat Vermont’s grid favorably. If a catastrophic event occurs in Vernon, we might want to think about the additional power a response would require, regardless of whether on-site generators are functional. It is worth conceding that, as far as rates and grid reliability go, there would be a massive difference between a planned and unplanned shutdown. 2% may seem like a small number, but it could be the proverbial straw that breaks ISO-NE’s back. Hopefully the experts’ failure of imagination won’t make a bad situation even worse.

krister adams:

October 9, 2012 at 11:55 am

I work for a statewide, non-profit, affordable housing develper/owner/manager. If we did not receive funding subsidy thru RE Vermont, Efficiency Vermont, Vermont Fuel Efficiency program and others, we could not have performed desparately needed energy efficiency upgrades to well over 100 units in the past couple of years. This obviously benefits residents and the owner, keeps these properties viable for long-term taxes and affordable housing for the community, employed many VT contractors, significantly impacts greenhouse gas emmissions/pollution, impacts wastefulness, promotes energy independance, etc., etc. If Brock and others think that VEDA or othe grant programs can fill this funding gap they are sorely mistaken and do not have a grasp on this issue at all.

Structurally, power plants generally supply power to a grid — not to residents near its facility. When I lived in Bellows Falls — I could hear the falls — but the hydro facility pushed power up to the NE Grid and my house got power down from the NE Grid — via the transformer yard near the dam. The whole hydro plant is tiny — yet if I recall — generates around 60MW.

A while back Bellows Falls — in an astonishing attempt — tried to seize the dam via Eminent Domain!

Anyway — when VY boasts it supplies “1/3rd of Vermont’s electricity” — that is deceptive — all that means is that VT consumes 3X and it generates 1X. But it generates that to the grid — not homes nearby or statewide.

A number of nuke plants on the NE Grid — like VY — NEED GRID POWER to be stable, safe and operational. All these plants have back-up generators — but if we went “grid down” and generator power failed somewhere — that plant would go critical. The reactor and the fuel pool would be at risk. (see: http://fairewinds.com/ )

VTDigger.org requires that all commenters identify themselves by their authentic first and last names. Initials, pseudonyms or screen names are not permissible. The purpose of this policy is to encourage a civil discourse among neighbors who are willing to stand behind their identities and their comments.

As a result of our comment policy, VTDigger.org has created a safe zone for readers who wish to engage in a thoughtful discussion on a range of subjects, regardless of where they stand. We hope you join the conversation.

Privacy policy

VTDigger.org does not share specific information about our readers with other entities. Email addresses we collect through our subscription list and comment submissions are kept private.

We use Google analytics to generate aggregated data regarding the size and geographic distribution of our readership. This information helps us gauge how many readers come to the website and what towns they live in. It does not include addresses or other identifying characteristics about our readers.